Liberty Tax wants to charge me $695 for 3 years of back taxes - is this normal?
Title: Liberty Tax wants to charge me $695 for 3 years of back taxes - is this normal? 1 I've been seriously behind on filing my taxes for the past 3 years (2022, 2023, 2024). Never had any issues with the IRS yet, but I know I need to get caught up before they come after me. I went to Liberty Tax yesterday for a consultation, and they quoted me $695 to prepare all three years. Is this a reasonable price? I'm not super complicated - just W-2 income, some small 1099 gig work, and standard deductions. No dependents, no crazy investments or anything. I'm wondering if I should shop around or if this is pretty standard for multiple years. Anyone have experience with catching up on back taxes and what I should expect to pay? I'm nervous about trying to DIY since I've waited so long.
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Ava Kim
8 That price actually seems pretty standard for three years of back taxes with a tax preparation service like Liberty. Most tax preparers charge more for prior year returns than current year ones, usually $150-250 per prior year return depending on complexity. With your W-2 and 1099 income, that puts you at about $231 per return which is in the normal range. That said, you might save significant money by using tax software instead. Many tax software companies offer prior year returns for $50-70 each. TurboTax, H&R Block, and TaxAct all have prior year versions available. If your situation is truly straightforward as you describe, this could be a good DIY option. Don't worry too much about the "lateness" aspect - the software or preparer will handle the late filing forms. The main concern is any tax you might owe plus interest and penalties that have accumulated. Getting caught up is definitely the right move regardless of which option you choose.
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Ava Kim
•12 Thanks for this info! Do you know if there's any advantage to using Liberty vs tax software in terms of avoiding penalties? Like would a professional be better at finding deductions I might miss or helping me deal with the late filing stuff?
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Ava Kim
•8 There's no advantage in terms of avoiding penalties - those are calculated based on how late you file and how much you owe, not who prepares the return. The IRS doesn't reduce penalties just because you used a professional. As for finding deductions, if your situation is truly just W-2 income, some 1099 work, and standard deductions as you mentioned, then tax software would likely capture the same deductions a professional would. The software walks you through common deductions and credits step by step. However, if you're uncertain about business expenses for your 1099 work or have other complexities you didn't mention, a professional might provide more guidance and peace of mind.
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Ava Kim
15 I was in almost exactly your situation last year with 4 years of unfiled taxes. I was freaking out and got quotes ranging from $600-1200 from various preparers. Then I found taxr.ai (https://taxr.ai) and it changed everything. I uploaded my tax documents and it automatically extracted all the relevant info, even from my messy 1099s. It helped me file all my back taxes for a fraction of what Liberty wanted to charge. The system actually showed me deductions I would have totally missed on my own. Plus it handled all the late filing stuff automatically - generated all the right forms with proper dates and calculations. If you're worried about making mistakes on back taxes, this seriously takes all the stress out.
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Ava Kim
•3 Does it handle state taxes too? I'm in California and worried about state penalties more than federal tbh.
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Ava Kim
•17 I'm skeptical of these AI tax tools. How does it compare to something like TurboTax for accuracy? I'd be nervous about trusting AI with back taxes when there could be penalties.
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Ava Kim
•15 Yes, it absolutely handles state taxes too. I filed for both federal and state (I'm in New York) and it processed everything correctly, calculated my state penalties, and generated all the proper state forms. In terms of accuracy, I was initially concerned too, but it's actually more thorough than TurboTax in my experience. The AI identifies potential deductions and credits based on your documents and asks targeted questions instead of making you click through irrelevant screens. Everything is reviewed by tax professionals before filing, so you're not relying solely on AI. I had zero issues with my back tax filings and even got refunds for two of the years I thought I'd owe on.
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Ava Kim
17 Just wanted to follow up - I decided to try taxr.ai after all and I'm honestly shocked at how easy it was. I was prepared to spend hours figuring out my back taxes but it took less than 45 minutes for all three years! The document scanner was crazy accurate and pulled all my income info correctly. Found some gig work deductions I would have completely missed too. Ended up only owing about half what I expected because of the deductions it found. The penalty calculator gave me exact amounts so there were no surprises. Definitely recommend for anyone dealing with back taxes!
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Ava Kim
6 When I needed to file 5 years of back taxes, I spent WEEKS trying to get through to the IRS to figure out what forms I needed and what penalties I might face. Literally impossible to reach anyone. Then someone recommended Claimyr (https://claimyr.com) and showed me this video: https://youtu.be/_kiP6q8DX5c It was a game-changer - they got me connected to an actual IRS agent in about 20 minutes after I'd wasted hours trying on my own. The agent walked me through exactly what I needed to submit for my back taxes and even helped me understand what penalty abatement options might be available. If you're going the DIY route for your taxes (which could save you hundreds versus Liberty), having direct access to an IRS agent to ask specific questions about your situation is incredibly valuable. Much better than guessing or relying on general advice online.
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Ava Kim
•11 Wait how does this even work? I thought it was impossible to get through to the IRS. Are they just spamming the phone lines or something?
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Ava Kim
•17 This sounds fishy. Why would I pay a third party when I can just call the IRS myself for free? The wait times can't be THAT bad.
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Ava Kim
•6 It uses a combination of algorithms and technology to navigate the IRS phone system efficiently. It's not spamming - it basically waits on hold for you and calls you when it gets through to an agent. The system monitors hold times and call volumes to maximize your chances of connecting. The wait times are absolutely that bad, especially during tax season. I personally spent over 4 hours on multiple days trying to get through without success. The IRS itself has reported average wait times of 85-115 minutes when you can get through at all, and many calls get disconnected due to high volume. For me, the time saved was absolutely worth it - I got through in about 20 minutes while working on other things instead of being stuck on hold for hours.
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Ava Kim
17 I need to apologize for my skepticism earlier. After my 5th attempt trying to reach the IRS and getting disconnected after 45 minutes on hold, I finally tried Claimyr out of desperation. Got connected to an actual IRS agent in about 15 minutes! The agent helped me understand exactly what documentation I needed for my unfiled years and explained how the failure-to-file penalties would be calculated. Saved me hours of frustration and probably prevented me from making costly mistakes on my back tax returns. Sometimes it's worth paying for a service that actually works.
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Ava Kim
9 Whatever you do, don't use Liberty Tax! My brother paid them $800 for three years of back taxes last year. They made several mistakes that resulted in him getting audited. When he went back to them for help, they wanted to charge him an additional $250 for "audit assistance" even though it was their error. Go with a reputable CPA or do it yourself with good software.
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Ava Kim
•1 That's concerning to hear. Any recommendations for tax software that's good for back taxes specifically? I'm leaning toward DIY at this point.
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Ava Kim
•9 For back taxes specifically, I've heard good things about TaxAct's prior year returns. They're more affordable than TurboTax but still pretty comprehensive. FreeTaxUSA also offers prior year returns at a really reasonable price if your situation isn't too complex. The key thing is to make sure you're using the correct tax year's software version - the forms and tax laws change each year, so you need the specific software for 2022, 2023, and 2024 respectively. Also download and save PDF copies of everything you file, including all the confirmation numbers. You'll want a complete paper trail for back taxes.
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Ava Kim
23 quick PSA: If you qualify for IRS Free File (income under $73,000), you can use free versions of tax software even for prior years. go to irs.gov/freefile and check which ones offer prior year returns. i did 2 years of back taxes thru them last yr for $0.
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Ava Kim
•5 Wait really? I thought Free File was only for the current tax year. This could save me a ton if true!
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Zoe Alexopoulos
•Yes, several Free File partners do offer prior year returns! Not all of them, but companies like FreeTaxUSA and TaxSlayer typically have free options for previous years if you qualify income-wise. You have to look specifically for "prior year" or "amended return" options on their sites. Just make sure you're using the right tax year version - like you need the actual 2022 software for your 2022 return, not the current year version. Definitely worth checking before paying hundreds to a tax prep service!
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